AMP Bank post 1 per cent decline in first half profit results
Friday August 21, 2009
AMP Bank released its first half profit results with figures showing only a one per cent decline in profits to $362 million, down from $366 million as recorded in the previously corresponding period. The financial results cover the six months to 30 June 2009 and were said to be better than expected given the recent state of the Australian and global economies.
The AMP bank underlying profit results, which the bank believes is the preferred measure as it is not affected by market volatility, were also better than expected with a decline of 16 per cent to $367 million. This is as opposed to the forecasted consensus estimate of underlying profit being around $275 million.
AMP Banks Key Performance Measures for the First Half Profit Results for 2009 (1H 09):
- Underlying profit A$367 million (as compared with A$437 million 1H 08 and A$373 million in 2H 08)
- Underlying return on equity 31.6 per cent (as compared to 40.5 per cent 1H 08)
- AMP Capitol Investors external net cashflows at A$192 million (down from A$369 million in 1H 08)
- Net cashflows in AMP Financial Services up 14 per cent to A$865 million
- 63 per cent of AUM met or exceeded benchmark over five years to 30 June 2009
- AMP Financial Services business reported an eight per cent fall in operating earnings to $307 million
- Operating earnings fell 45 per cent to $43 million
- Assets under management fell 11 per cent to $89.9 billion
AMP Banks Chief executive Craig Dunn stated that even though the financial markets were indeed improving it was the ongoing volatility and low investor sentiment that will continue to impact.
"The short term outlook is starting to look positive. The rally is sustainable (although) it may have gotten ahead of itself.' Mr Dunn stated.
"We're not only facing regulatory change but we can also see significant shifts in consumer behaviour.''
"This result reflects tight cost control, robust net cashflows, improving investment performance, a further strengthening of the group's capital position, along with improved market share in Australian superannuation, retirement incomes and risk insurance,'' he said.
"We will continue with active and prudent capital management to ensure balance sheet strength and flexibility to grow and reshape the business,'' Mr Dunn said.
Mr Dunn also stated that AMP was going to remain aware for any potential takeover opportunities and maintain its strong capital surplus.
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